Trading Question to wdongli

No buffers: any little mistake can be fatal

A lot of market players tend to link the consequences in the market to a few factors only but if we don't forget what we need to pay attention the market raise too many factors we need to concern.

There are vital few and many trivial and how not allow any of trivial many turn to vital few against us. No one could always make the money for every transaction in the market but every winner for long term has to get a no-loss position for their portfolio.

As a professional to apply for a job, you have to let your bosses to know you have the needed elements:

1. attributes,
2. skills,
3. knowledge,
4. qualifications,
5. experience and
5. desire to add the organization's values.

All are to define what you should have for your job. We all know not all of the jobs we could do but we definitely could find jobs we could do. How to find a job you love is different to find a job you could do. The key is how well you know your attributes, skills, knowledge, qualifications, experience, and desire for the firm. All we should know that.

When we work in the market, few try to match themselves to the job selection criteria as responsible professionals with fully responsibilities of the house in their working circles. We don't know what attributes we should have; we find our skills are not good for what we want to get; we have a lot of knowledge but we don't know black swans, mass psychology, and balance of risks and profit, difference of signals and random noise, and then we find, if we are honest, we make more errors than we make right.

Tropo advised me to leave away from the market completely. Mr Market is the most horrible boss if you follow his command or words everyday. Too many employees of Mr Market have chosen to leave. Few part-time ones dare to quit their jobs in offices and workshops. Why shouldn't I say bye bye to the market?

However Mr Market doesn't force you to do anything and you can say NO. Now Mr. Market is lowering the price again and again, which make nearly all to sell on fire. I don't want to sell actively on fire. I have experiences about it. Mr. Market could lower and lower the price but tomorrow he could higher and higher the price. Logically you should buy low and sell high but you have to get your buffer to hold your position before lowering finishes and the price starts its upward trend.

We don't need to leave our neck on the slaughter table. We don't need to take the chips away at the price we don't want to accept. We could retreat consciously including to work in the offices or workshop. Trading everyday is not necessarily better than leaving the chips on table for half or years if the price is ridiculous low!

Of course if you can trade everyday for your living. But I find I could not trade everyday. I feel I only can do is bang to put some money into the market when I believe it is at the worst points in my holding horizon. I could not run in the party and ruins without losing my minds. I need peaceful mind, cool judgment, big buffer backing up me, good organization of my market service business when the warriors need the service, and so on.

I need to accumulate the asset and cash reserve enough inactively when all run in the ruins and patiently to wait Sun rising and I need to build my last defending line to hold. It is a strategical retreat before I can launch my service to sell the shares to the warriors who have run to the party in the fear to miss! If you have to use your bond, labor value, you don't need to fear to use it if you can and logically you should.

Your business, the market service for warriors, need you do all for profit not for anything else! Who laugh at last are better, ain't they? No straight line to lead anyone into the sky. You are not different.

 

Patience is virtue but not cost free

All of us know patience is virtue but don't know it needs some necessary conditions when all of us rush into a exit in stampede if you are in the place when disasters follow one after another.

All of us have some signal monitors to trigger our corresponding actions but a lot of us don't want to recognize the fact that when all rush for one thing, all of signal are to sell on fire. We are all fearful in fact. We all tend to rush into the exit without thinking about the risk in stampede. Patience is virtue but when you desperately need it? Do you know you need the cash reserve enough and then you can be patient? If you have made a lot of mistakes to get into this ruins too early for bargains and still believe your portfolio has the margin safety, what you should do?

We could not see very far ahead and no signal in any monitoring system could be trusted in 100% in the extreme conditions since most of systems are based on the images of the signals and noise in the rear mirror, which could tell you some truth in normal time but could not help you to get the views which black swans could trigger the pendulum swing back to the historical means and perhaps the opposite extreme points.

Do you believe XAO would not come back to 5000 in a year or years? Do you see the volatility is caused fears and greed, our primary instinct rather than the fact EU crashes onto the ground? Patience is virtue and it needs enough buffer to let your mind peaceful. In the ruins if you could be survival, your peaceful mind would make you patience. Patience is virtue and then it will benefit to your future sooner or later.

 

Yes, but it is possible to make money in any market.

using options or derivatives

 

What is impossible?

Options and derivatives could be the money trees, which is really possible. The problem is most of users of optins and derivatives use them as money destructive bombs.

What is impossible if we really know enough and are disciplined? What we know is impotant but it seems more important to know what we don't know or we feel know but we really don't know. Why so many people play the fire without protection in the market? They believe they know all but they just know the rumors and facts they could see. However could we know the future.

Prudence and protection are necessary with some necessary lucks. Never and ever buy anything or hold anything just because what you feel. Never and ever play the market by following the market sentiment.

Nothing is impossible but could we make the thing we want to be possible? A challenge to all of market players. At moment what is possible or impossible to us? Could you be survival if EU Crashes and win a lot if EU does not crash down to ground?